Wednesday, February 29, 2012

STRATFOR: George Friedman, Robert Kaplan on China

There is widespread international debate on the extent to which China's naval expansions pose a threat to U.S. dominance of the world's oceans. George Friedman and author and foreign affairs expert Robert Kaplan agree on China's ambition, but have very different views on its geopolitical impact.

Louise Yamada sees "structural bull market" in tech stocks

Louise Yamada, a well known technical analyst, says after a 10 year "repair process," technology stocks are entering a "new structural bull market."
[Download MP3]

Alice Schroeder: Buffett’s Ego Keeps Shareholders in Dark

Alice Schroeder, author of Snowball, says Warren Buffett will not reveal the name of his successor to shareholders because "he wants the limelight."
[Download MP3]

Willem Buiter: Fed Keeps Door Open for QE3

Andrew Lo on Consuelo Mack WealthTrack

Lo teaches at MIT, and is one of sharpest academics out there. He's written some stellar papers on the financial crisis and hedge fund replication.

Tuesday, February 28, 2012

Peter Diamandis on Abundance

Peter Diamandis is the Founder and Chairman of the X PRIZE Foundation, an educational non-profit prize institute whose mission is to create radical breakthroughs for the benefit of humanity

Peter Kiernan: America at Risk of ‘Becoming China’s Bitch!’

From Peter Kiernan, author of the provocatively-named book, "Becoming China's Bitch":

"Paranoia is appropriate for us in relation to China.What we are facing is nothing less than a test of American independence."

"They have built a replacement [for U.S. spending]; what have we done to replace that lending capability? Codependent relationships rarely last forever and they don't end pretty."

Money As Debt

Money As Debt is a fast-paced and highly entertaining animated feature by artist & videographer, Paul Grignon. It explains today's magically perverse DEBT-MONEY SYSTEM in terms that are easy to understand.Check out his website: http://www.moneyasdebt.net/

Jon Najarian talking VIX


Brian Greene: Why Parallel Universes May Exist

Jason Pride: Stay Conservative on Stocks

Jason Pride, director of investment strategy at Glenmede, talks about the U.S. economy and investment strategy

Don Luskin: Don't Ignore European Sovereign Bonds

Don Luskin, CIO of TrendMacro, believes cash-rich banks should revisit investment opportunities in sovereign debt of countries such as Spain and Italy.

Leon Cooperman loves equities

Leon Cooperman discusses why he thinks Treasury bonds are a bad bet for investors; investing in dividend-yielding stocks; the direction of commodities; and his strategy for the foreseeable future.

Peter Schiff: Dow 17000 by 2013?

Peter Schiff, Euro Pacific Capital, and Paul Hickey, Bespoke Investment Group, discuss bullish calls on stocks and the direction of the market.

El-Erian: Greek Package Will Fail

Mohamed El-Erian says that Greece has been sacrificed in order to build a firewall and the cost is a society that has to deal with tremendous austerity

Monday, February 27, 2012

Grant Williams Presentation: The Simplicity (of owning Gold)

Grant Williams Presentation to the Cambridge House California Investment Conference in Indian Wells, CA. Williams is a portfolio manager at Vulpes Investment Management in Singapore, and also publishes the excellent Things That Make You Go Hmmm report.



Saxo Bank's Jakobsen: Market Is Doing a 2011 Again

Steen Jakobsen is the chief economist at Saxo Bank.
"When you have the same policy being repeated year after year you have the same reaction. What is happening right now is that we have a huge dislocation over who is going to use the LTRO, we have a huge dislocation in the payment system."

Warren Buffett: Good Time to Buy a Home

Now is a good time to buy a home and finance it with a 30-year mortgage, says Warren Buffett. He discusses why he wants to invest in more businesses, explains why he bought eight European stocks at the end of 2011 and also shares why he decided to invest in the Omaha World-Herald.

Global Hedge Fund Investor Base Has Changed

Anita Nemes, Deutsche Bank's London-based global head of capital introduction, talks about the outlook for the hedge-fund industry. Global hedge fund assets may rise 12% this year to a record $2.26T as investors reduce cash and seek returns, according to the Deutsche Bank Alternative Investment Survey.

Friday, February 24, 2012

David Herro is buying Japanese equities

David Herro, CIO at Chicago-based Harris and manager of the value-oriented Oakmark International fund, says he is "overweight" Japanese stocks because of valuations and improving quality. [Disclaimer: we own the hedged Japanese Equity ETF, DXJ]
[Download MP3]

Lakshman Achuthan: GDP Data Signals U.S. Recession

Lakshman Achuthan is on a roll. After talking to CNBC today, he now hits up Bloomberg and reiterates his recession call...
[MP3 Here]

David Rosenberg: US GDP `Close to' 1% in First-Quarter

The housing bubble is alive and well in Delhi

As a follow up to our popular Is a housing bubble brewing in South Delhi? post from 2010, we present a timely survey of global home prices from Global Property Guide [HT: BusinessInsider].

Price in New Delhi are up an astounding 25% YoY. One should bear in mind that this increase has occurred in the face of a long interest rate tightening cycle by the RBI, which has been trying to limit the country's seemingly relentless rise in inflation.Moreover, home price increases across most of Asia seem to be slowing as well.

Delhi home prices didn't make sense back when we first wrote about it and  they don't make sense now, but Global Property Guide notes that "demand is still expected to pick up, because the Reserve Bank of India (RBI), in its Q3 review of Macroeconomic and Monetary Developments, signaled a pause in monetary policy tightening, in order to fuel economic growth."

There are also signs of life in the US housing market:
"... [The] house price index rose in the last quarter in 27 states and the District of Columbia. When coupled with the fact that about half of all U.S. states saw price increases in the latest quarter, this growth adds to mounting evidence that real estate markets are seeing at least some signs of life..."

Lakshman Achuthan (ECRI) Sticks to Recession Call!

Lakshman Achuthan of the Economic Cycle Research Institute (ECRI) made a bold recession call last year, and even in the face of  improving US data, he is sticking to it (we at Price Signals also believe that in the US slowdown / recession story).

Our call stands.When you look at the hard data that is used to officially date business cycle recessions, it has been getting worse, not better, despite what the consensus view of an improving economy has been.

You put all this [GDP, personal income, sales, and industrial production] — you put it into a coincident index of the U.S. economy and if you look at year-over-year growth of that index, it’s now at a 21-month low,” Achuthan said. “You haven’t had a decline like that in the past 50 years without recession following in short order.”

Bloomberg: Hedge Fund Titans

Jim Chanos of Kynikos Associates, Jamie Zimmerman of Litespeed, Michael Novogratz of Fortress, and Steve Kuhn of Pine River Capital, discuss the history of the hedge fund industry and government regulation.

Morgan Stanley: US Equities Will Fall 15% by Year End

Adam Parker, head of U.S. equity strategy at Morgan Stanley, talks about the outlook for U.S. stocks and his investment strategy

John Burbank: Rising Oil Prices Pose Global Risks

Thursday, February 23, 2012

Bruce Bartlett on The Daily Show!

Bruce Bartlett was on Ronald Reagan's economic council, and he and David Stockman appear to be the only  GOP economists who realize that cutting taxes is not a one-size-fits-all solution to all of life's problems.

Does More Money Buy Happiness?

Rakesh Sarin, Professor at the UCLA Anderson School of Management,  says it's not a simple answer.

60 Minutes on Magnus Carlsen, the Mozart of Chess

At age 21, chess grandmaster Magnus Carlsen is the number one player in the world.

"That's the most amazing thing I've ever seen." That's what 60 Minutes correspondent Bob Simon said after witnessing chess prodigy Magnus Carlsen play 10 opponents simultaneously-- with his back turned and all 10 boards out of sight!



Jeff Saut sees massive shift into US equities

Jeff Saut of Raymond James says markets have been ignoring bad news which is good news in the intermediate or long-term and the world is profoundly under invested in US equities. When it becomes apparent that we are not slipping into another recession there will be a massive shift into U.S. equities.

Dan Yergin: How High Can Oil Prices Go?

"The next several months are going to be really crucial. It's like everybody is coming towards the end game here, one way or the other"

Meredith Whitney on the Mortgage Market

Low rates have not moved the mortgage market, says Meredith Whitney. Low rates are not the solution and banks have not done anything to remedy the mortgage markets. US housing policy should include banks working together to have an industry re-pricing.

Roach, Rutledge: Growth In China Slowing?

Discussing the structural challenges China is facing as its economy slows, with John Rutledge, Rutledge Capital and Stephen Roach, Morgan Stanley Asia non-executive chairman

Dan Yergin: Iran-UN Face-Off Getting Serious

Dan Yergin, Chairman of Cambridge Energy Research Associates, says the face-off between the UN and Iran is heating up, and Iran's recent responses have only raised tensions further.

Doug Kass: Time to Get Short the Market

Stephen Roach: US Consumer Still on Thin Ice

Stephen Roach says that says the slowdown in the economic recovery is the result of the slowdown in consumer spending - when you get shocks to the consumer, like gas prices, the cushion isn't there.

Meg Whitman on HP's Turnaround

We have a lot of work to do, but these things take time...

David Kotok: Greek Crisis May Create `Tiers' of Debt

Liam Dalton (Axiom) likes Transocean, Gold Stocks

Liam Dalton of Axiom Capital Management likes Transocean, Caterpillar, and gold stocks.

Chanos, Zimmerman on Hedge Fund History

Jim Chanos of Kynikos Associates, Jamie Zimmerman of Litespeed, Michael Novogratz of Fortress, and Steve Kuhn of Pine River Capital, discuss the history of the hedge fund industry and government regulation. The full conversation, "Titans at the Table," airs tomorrow on Bloomberg Television at 9 pm ET.

Wednesday, February 22, 2012

Mike Mayo: Bank Madness On Wall Street

In his interview with Steve Forbes, veteran bank analyst Mike Mayo, author of Exile On Wall Street, discusses how he wants to fix the way big banks do business.

John Buckingham: Ignore Dividends At Your Own Peril

Value manager John Buckingham of Al Frank Management says dividend-paying stocks are the best bet in his interview with Steve Forbes.

Value Plays For A Housing Rebound

Forbes: Why Poker is better than Business School

George Carlin: The Illusion Of Choice

A classic

Cooperman Shuns Treasuries; Favors Gold, S&P

Leon Cooperman of Omega Advisors says `there's just no shortage of attractive stocks' while discussing equities including the tech, financial and healthcare sectors.


Cooperman Has `No Interest' in U.S. Treasuries


Cooperman on Where to Invest

Tom DeMark Sees Top for the S&P

DeMark is finally back on Bloomberg and discussing his outlook for the market. He sees similarities to the July 1987 to July 1988 time frame, and thinks that a top is coming for the S&P.

Meredith Whitney: Middle Class Squeezed Out of Banking

The high-end income consumer has dominated more of total spending, says Meredith Whitney. The middle class has been compromised because they have been "de-banked." "Where spending has been compromised are the areas that have fueled the economy for the last 15-20 years." Whitney also said municipal finances remain a major concern and are weighing on the minds of many consumers.“For the last three and a half years I’ve spent so much time focusing on this issue because I really think it shapes the future of the American economy,” Whitney said. “This issue is so much bigger than the municipal bond market.”

Jim Rogers happy to sit out equity bull run

Ol' Jimmy Rogers is on Reuters Insider today saying 2012 is the year of elections, so we may have to wait until 2013 for problems to resurface. In a second clip, he says that the Greece deal is a sham.

Tuesday, February 21, 2012

Woody Brock: “Deficits Are Wonderful”

Woody Brock has been doing the rounds lately to promote his book, American Gridlock. Here he explains his $10 trillion ‘Domestic Marshall Plan

Jonathan Tepper on the Greek Bailout Deal

Jonathan Tepper of Variant Perception tells CNBC: "I think that if you look at the best case scenario for Greece, put forward by the ECB and the IMF, you are looking at essentially 120% debt to GDP ratio, so clearly getting the private sector involved leaves Greece with an enormous debt burden that it can't possibly service properly."

Investment Banking is bad for your health!

Who knew it? Doing 'God's work,' as Lloyd Blankfein famously put, has its perils.

Friday, February 17, 2012

Aleph Blog: Musings on the 400 Percent Man

Nice follow up read to our recent post on The 400% Man from the excellent Aleph Blog: Musings on the 400% Man

Kevin Douglas: A super investor?

Following up on our post on The 400% Man, we now present Kevin Douglas who is profiled by Elliot Turner in his blog, Compounding My Interests. Douglas is the founder and chairman of Douglas Telecom in California, and has invested in IMAX, American Superconductor, Monster Beverages, Westport Innovations, Jos. A. Bank, Stamps.com, and SilverBirch Energy. He is a passive investor who identifies big secular trends, followed by a handful of companies that he believes will benefit from those trends. He takes large stakes in them, and sits tight for the long-term.

Here's Turner's analysis of  Douglas's incredible investment in Monster:
In Monster Beverages, formerly Hansen Natural Corporation, Mr. Douglas bought 329,719 shares at an average price of $0.58 between 2003 and 2004.  At today’s share price of $109.68 that represents a 92% CAGR, having turned around $190 thousand into a sum greater than $36 million

Michael Pachter discusses Dreamworks deal in China

Michael Pachter of Wedbush Securities explains why the Dreamworks deal in China is unlikely to generate huge revenue for the company in the near-term.

Vietnam Stock Market to Double in 2 Years?

David Roes, CEO of Asean Investment Management, believes Vietnam stocks offer 120% upside in the next 24 months, as inflation and bank deposit rates fall.

Richard Fisher: QE3 is a Fantasy of Wall Street

Fisher, head of the Dallas Fed, is one of the few Central Bankers we respect. Sadly, he is not on the voting committee this year. Here he discusses quantitative easing, interest rates, and the US economic recovery.


His past speeches can be found here.

Richard Bernstein: US Assets to Become More Attractive

US assets will become increasingly attractive over the next 12-18 months, says Richard Bernstein. "We're in the midst of the global deflation of the credit bubble."

Jim Rogers: Let Greece go bankrupt

"Let Greece go bankrupt, let all the people who bankrupt go bankrupt, and then you can start over, you reorganize the assets and start over. Until that happens, this is going to be an on-going endless discussion."

Bloomberg Manager Mash-Up: Active Investing vs. Indexing

Francis Kinniry of Vanguard, Ian Lapey of Third Avenue, Matt McLennan of First Eagle, and Christian Ulrich of Invesco discuss active investing versus indexing at the Bloomberg Link Portfolio Manager Mash-Up conference in New York

John Bogle: Capital Gains should be taxed as income

Bogle, of course, is the legendary founder of indexing giant Vanguard. Here he talks about financial markets, investment strategy and US tax policy at the Bloomberg Link Portfolio Manager Mash-Up conference in New York

Dick Bove: US Banks are cheap and undervalued

Well known bank analyst, Dick Bove, continues to profess his love for U.S. bank stocks.

Harry Dent sees new highs on the S&P this year!



In an earlier interview, he sees the S&P 500 falling 30-50% in 2012...

Jason Trennert: S&P May Hit 1500 Before Falling

Trennert is a managing partner at Strategas


Older interview with Trennert here.

Thursday, February 16, 2012

@Google Presents: Daniel Kahneman

Whitney Tilson regrets not buying Apple

Tilson regrets not buying Apple, and he's short Lululemon, LinkedIn, GroupOn and Green Mountain Coffee.

“[Lululemon's] a fine company – but we’re short because it’s trading at 10.6 times sales – and 41 times earnings – and operating at 20% net margins. We’re staying with the short – mathematically I feel almost certain that a company this overvalued will reward on the short side.”

“LinkedIn is a good business but at 16.5 times revenues and a $10 billion market cap it’s overvalued”

“And as for Groupon, I subscribed and it feels like spam to me and I don’t see any real barriers to entry. There’s some value but it’s way south of what it should be.”

Whitney Tilson likes Big Tech

Tilson likes large cap stocks, especially tech stocks like Microsoft and Dell, even after the recent run up. He also likes JC Penney, Goldman and Citi.

"They’re incredible companies that are earning profits and trading at 10 to 12 times earnings with strong balance sheets and they’re returning cash to shareholders – they’re not exciting but if you’ve got a 5-10 year horizon and you want to earn better returns that Treasurys I think they’re the way to go."

Between Cisco, Oracle, Intel, Hewlett Packard, Dell, Microsoft and Apple – every value guy I know - they own 2 or 3 of those.”

We still think Dell is cheap. Although it’s gone from 5.5 earnings to 7 times earnings it’s still pretty darn cheap.”

"JCP has low sales per square foot relative to its peers and quite high expenses relative to peers – this is an underperforming and undermanaged business that now has a great retail guy. I think there’s a lot of upside here."

"Citi is still trading at a 36% discount to tangible book – even after this run up. Goldman is trading at 7% discount to tangible book. We think Goldman should be worth a premium to book and Citi is worth at least book"

Michael Pachter: It's over for Netflix

Michael Pacter, analyst at Webush Securities, explains why he thinks it's "over" for Netflix.

RSA Animate - The Secret Powers of Time

Stephen Leeb discusses oil, Iran embargo on Capital Account

Stephen Leeb is the author of "Game Over: How You Can Prosper in a Shattered Economy" and many other gloomy titles.

David Kotok Still Likes US Equities

Tobias Levkovich sees possible pullback in equities

Levkovich is the chief US equity strategist for Citigroup

Wednesday, February 15, 2012

Jeff Gundlach Presentation: The decline and fall of the Roman Empire

(HT: ZeroHedge)
2-14-12 JEG Webcast Roman Empire - FINAL

The 400% man

SmartMoney has a must-read article on Allan Mecham, a man we had never come across before. Mecham, a 34 year old college drop out from Utah, runs a private $80M investment firm called Arlington Value Management that has returned 400% percent over the last 12 years from a concentrated equity portfolio with low turnover (1-2 new ideas a year). He started his firm at the ripe old age of 22, and like Buffett, tries to find businesses with quality management, strong cash flow, and wide moats. His positions include Watsco, a $2B distributor of air-conditioning equipment and supplies, and Heico which makes components for jet engines.

On frequent trading: 
"Activity is the enemy of returns. If I find two new ideas a year, that's phenomenal."
"It's laughable to think that in this competitive world, you're going to find brilliant ideas every day. The world's just not set up that way."

On herd behavior:
Mecham says one of his big advantages over Wall Street managers is that he is free to ignore "noise" -- like the quarterly obsession over short-term earnings... The first question he asks of any investment, he says, is where it will be in 10 years or more: "You have to have a high degree of confidence in the cash flows over the next decade."

Takeaways for investors
Ignore the economy. Where is the economy going next quarter? Where is the S&P headed? Mecham says he ignores those issues; instead, he looks for stable, defensive businesses that can thrive whenever bad times come.

Don't diversify. Most mutual funds own dozens or even hundreds of stocks. Smaller funds and private-investment funds can rely on just six or eight stocks.

Don't sweat the spreadsheets. Many Wall Street analysts build elaborate financial analyses to calculate a company's earnings growth and other patterns. But some say it's more productive to use that time trying to understand a company and its industry -- the management, the competition, the customers and so on.

Think decades, not quarters. Shareholders and managers tend to focus on companies' announcements of quarterly or annual earnings, and whether they beat or miss analysts' estimates, but it's more useful to try to figure out where a company will be in a decade or more.

Don't just do something. Stand there! One of the toughest things for investors to do is to sit still but most of the time inactivity is the right longer-term move.

Tony Crescenzi: US Growth Acceleration Not Likely

Tony Crescenzi, portfolio manager and strategist at Pimco, discusses the U.S. and European economies

Gordon Chang on China, US Trade

Gordon Chang, author of "The Coming Collapse of China," talks about the meeting between Obama and Chinese VP Xi Jinping, and the prospects of China giving financial aid to Europe.

Warren Buffett's Portfolio Shake-Up

Berkshire Hathaway took stakes in Liberty Media and dialysis-facility owner DaVita after Buffett hired Ted Weschler to manage investments. DaVita is their new largest position.

Tuesday, February 14, 2012

NPR: Natural Gas Boom Energizing The Chemical Industry

James Grant: Fed Should Heed Lessons of 1920s

“The Fed is not content to let interest rates find their levels, they must repress them, and they are not content to let housing prices find their levels, they seek to intervene to prop them up,” Grant said in a radio interview on Bloomberg Surveillance with Ken Prewitt and Tom Keene. “The results of all this intervention is not to cure what ails us, but prolongs the symptoms of what distresses us.”

What is discouraging about the Great Recession is that it seems not to end. The historical comparison is useful to invite us all to consider the present day orthodoxy and if it is possible that it is wrong. I think that it might be wrong.”

The U.S. Treasury should begin to issue longer-dated bonds backed by gold and investors should also buy gold as it is “something substantial,” Grant said. The bond bull market of the past 30 years has made investors complacent to the risk of owning bonds, he said.

[Download MP3]

Bill Fleckenstein on the folly of money printing

Hedge fund manager Bill Fleckenstein explains why no matter how much money the Federal Reserve wills into existence, Fed policies won't make anything better.

Thomas Wagner sees Distressed Debt Investment Opportunities

Thomas Wagner, co-founder of Knighthead Capital Management, talks about investment opportunities in distressed debt.

Jessop Sees Greece Leaving Euro, Gold Rising to $2,500

Julian Jessop, chief global economist at Capital Economics, talks about Greece's membership of the euro and the outlook for gold and other commodities.

Paul Volcker: Foreign critics should not worry about ‘my’ rule

"... let us not be swayed by the smokescreen of lobbyists dedicated to protecting the interests of some highly compensated traders and their risk-prone banks.

US regulators are now considering what adjustments should be made in their preliminary rules with respect to market making and proprietary trading, while hopefully reducing the inevitable complications imposed by the very complexity of modern finance. I regret that the effect, if not the intent, of much of the lobbying has been to add complications rather than to clarify the principles involved. As with any new regulation, there will be, with experience, opportunities to deal with unnecessary frictions or unintended consequences. But I certainly take comfort with the stated confidence of the authorities that the rule adopted will be both workable and effective."

Monday, February 13, 2012

Woody Brock on Bloomberg Surveillance

Horace "Woody" Brock is one of the most arrogant people I've ever met, but also quite possibly one of the smartest. He has 5 degrees, and hedge funds gladly pay up for his research. Brock recently authored "American Gridlock" and says "the great mistake" made by Congress is the thought that there is no middle ground. Brock talks with Bloomberg Radio's Tom Keene on "Bloomberg Surveillance." [Download MP3]

Here's an older Woody Brock Video

Roger Altman sees a 'dire' debt and deficit outlook

Insight on US and European efforts to stem debt and deficits with Roger Altman of Evercore Partners. David Walker, of the Comeback America Initiative, also weighs in.

David Walker: We need to fix the budget deficit

David Walker was one of the few voices of sanity during his time at the Government Accountability Office (GAO). Unfortunately, he left after his constant warnings yielded nary a reaction from the powers that be. While Walker has moved on, Gao's website remains an excellent source for data regarding our perilous financial condition.

Richard Bernstein: Don't jump on the risk-on trade

People are piling into risky assets unnecessarily, says Richard Bernstein, Richard Bernstein Advisory Group. "Risky assets do not work on the downside of a credit bubble," he says. "Longer term, I don't think that's going to work."

Stephen Peak of Henderson Global sees opportunities in European equities

Stephen Peak of Henderson Global Investors discusses Europe

Doug Kass on CNBC

Jeremy Siegel: Siegel: Dow Could Hit 17,000

Wharton School professor (and perpetual stock booster) Jeremy Siegel believes the Dow could hit15,000 this year and 17,000 in the next few years. CNBC also reports on secretive hedge fund legend Louis Bacon.

Dennis Gartman discusses shipping stocks

Dennis Gartman looks at the big move behind shipping stocks and whether it's already too late to get in.

Bruce Berkowitz Says Focus on `Survivors'

Bruce Berkowitz of Fairholme just endured a year from hell as his overweight financials positions pushed his returns into deeply negative territory. He is undoubtedly enjoying the rally of 2012. Here he talks about his investment strategy, the performance of Bank of America, and Fairholme's stake in St. Joe. He believes that financial firms that endured the credit crisis in 2008 and 2009 will prosper.

David Rosenberg on Greece

Rosie talks about Greek austerity measures and the global economy

Jason Trennert: Housing is still in trouble and stocks are the only option

(from Dec 2, 2011) Jason Trennert of Strategas is a macro analyst. Here he talks with Tom Keene about November employment data and the outlook for the stock and gold markets.

Chris Whalen: America is returning to its Emerging Market roots!

Chris Whalen, a noted bank analyst and managing director at Tangent Capital Partners, talks about the financial industry and the US economy.

Margie Patel: Investors Should Shift to Equities

Margie Patel is a well regarded HY manager, and in this interview she discusses the appeal of equities, the outlook for the high-yield debt market and investment strategy.

Sunday, February 12, 2012

Clint Eastwood on CNBC for the first time

Eastwood's "Half-time in America" was the standout ad in this year's Superbowl.

Market Technicians see 50% correction ahead

Katie Stockton of MKM Partners, and Abigail Doolittle of Peak Theories chart the market's outlook, which indicates a serious correction in the next three to twelve months.

John Taylor: US debt will 'explode'

Taylor is a professor at Stanford and the man behind the famous 'Taylor Rule.'

We could get into a situation like Greece, quite frankly. People have to realize it is a precarious situation. The debt is going to explode if we don’t make some changes"

Chuck Royce on Consuelo Mack WealthTrack

Noted small cap value investor Charles 'Chuck' Royce was on Consuelo Mack this weekend. He believes that most people should be overweight equities, and is skeptical of the returns people can get from alternative assets and fixed income.

Thursday, February 9, 2012

Lombard Street's Dumas on Greece, European Debt

Charles Dumas, chairman of Lombard Street Research, talks about austerity measures in Greece and Europe's sovereign-debt crisis.

No Business Like Snow Business: The Economics of Big Ski Resorts

No Business Like Snow Business: The Economics of Big Ski Resorts

... both Vail and Whistler have devised and refined a business that keeps income as constant as the weather is variable. It comes down to two smart hedging strategies. Strategy One: Own the skiers. Strategy Two: Own the mountain.

Vail and Whistler hedge against bad snow by turning skiers into members. "Just under 40 percent of our lift tickets come from season passes sold before the ski season begins" ... Vail and Whistler make half their money from lodging, rentals, snow school, and food.

Vail and Whistler are considerably more profitable than large ski resorts in Europe precisely because they've embraced mountain monopolies. In Europe, the mountain is like a strip mall, with restaurants, rental shops, and service centers mostly owned by different companies renting space. At Whistler and Vail, the mountain is more like a cruise or amusement park, where vertical integration means vertical integration. From village to peak, Vail and Whistler own all the key businesses -- equipment rentals, food and beverage, and snow school.

Screen Shot 2012-02-07 at 12.12.47 AM.png

From a ski-nomics perspective, less competition insulates a stable and growing industry. As skier visits rise annually, Whistler and Vail can afford to raise ticket prices by a tick above inflation knowing that there's no chance of disruptive competition from a new entrant.
Screen Shot 2012-02-07 at 1.31.36 PM.png

Wow, David Einhorn was short Diamond Foods but covered just a little too soon

From the Q4 letter dated Jan 17, 2012:

"We also closed out our short of Diamond Foods (DMND) which, while small, was one of the fastest performing shorts in our history."

As almost everyone knows, shares tanked 35% this week after the company said it would restate earnings for the last two years over its payments to walnut growers, and said it would appoint a new CEO and CFO.

Bob Rodriguez: The best advice I ever got

"In the fall of 1974 I was in graduate school at USC taking a portfolio-management investment course. The financial markets were in difficulty, and I didn't understand how securities were being sold at such depressed levels. I had only recently discovered Security Analysis by Graham and Dodd when we had a guest lecturer come in named Charlie Munger, who went on about this idea of value investing. After the class was over, I walked up to Charlie and asked him if there was one thing that I could do that would make me a better investment professional. His answer was, 'Read history, read history, read history.' And so I became a good historian, reading both economic and financial history as well as general history. 

What I learned is that people relate to the crises they have experienced. So when the crisis of 2008 came, it felt like an old friend to me because it had so many similarities to the banking crisis of 1907. Asking Charlie's advice and then reading history allowed me to put those things in context."

CalSTRS $500M Infrastructure Bet

Discussing California State Teachers' Retirement System, (CalSTRS), making a $500M wager on infrastructure assets, with Greg Zuckerman

"Infrastructure investments - everything from pipelines and ports and roads - are sort of seen as the holy grail by those on Wall Street. They're not so correlated with other investments"

Endowments slow to recover from 2008 crisis

[LINK] Endowments slow to recover from 2008 crisis as hedge funds lag

Some interesting factoids:
- 47% of school funds have not recouped losses from 2008
- Average 10-year annualized returns lag behind average inflation-adjusted spending rates at schools.
- Endowments with more than $1B allocated  60% of their assets to alternatives
- Endowments with less than $25 million allocated 10% to alternatives
- Smaller endowments outperformed larger counterparts over the past 3years, but larger endowments did better over the five- and 10-year periods

Axiom's Dalton on Hedge Fund Strategies

(from Dec 21) Liam Dalton, CEO of Axiom Capital Management, talks about hedge fund investment strategies.

Dick Bove is not a big fan of the mortgage deal

Gary Shilling reiterates his recession call

"... this is the age of deleveraging. Look at what banks are doing, they are selling off assets and closing offices and cutting down. They need to improve their equity, reduce their leverage, the stocks are so low, they do not want to dilute shareholders, so they are trimming assets."

Myles Bradshaw (Pimco): `Fairly High' Risk of Disorderly Greek Default

Myles Bradshaw of Pimco discusses his government bonds strategy and the risk that a Greek debt default may trigger CDS